Correlation Between Rogers Communications and Telefonica
Can any of the company-specific risk be diversified away by investing in both Rogers Communications and Telefonica at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Rogers Communications and Telefonica into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rogers Communications and Telefonica SA ADR, you can compare the effects of market volatilities on Rogers Communications and Telefonica and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Rogers Communications with a short position of Telefonica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rogers Communications and Telefonica.
Diversification Opportunities for Rogers Communications and Telefonica
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Rogers and Telefonica is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Rogers Communications and Telefonica SA ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telefonica SA ADR and Rogers Communications is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Rogers Communications are associated (or correlated) with Telefonica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telefonica SA ADR has no effect on the direction of Rogers Communications i.e., Rogers Communications and Telefonica go up and down completely randomly.
Pair Corralation between Rogers Communications and Telefonica
Considering the 90-day investment horizon Rogers Communications is expected to under-perform the Telefonica. But the stock apears to be less risky and, when comparing its historical volatility, Rogers Communications is 1.02 times less risky than Telefonica. The stock trades about -0.2 of its potential returns per unit of risk. The Telefonica SA ADR is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest 453.00 in Telefonica SA ADR on August 23, 2024 and sell it today you would lose (10.00) from holding Telefonica SA ADR or give up 2.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Rogers Communications vs. Telefonica SA ADR
Performance |
| Timeline |
| Rogers Communications |
| Telefonica SA ADR |
Rogers Communications and Telefonica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rogers Communications and Telefonica
The main advantage of trading using opposite Rogers Communications and Telefonica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rogers Communications position performs unexpectedly, Telefonica can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Telefonica will offset losses from the drop in Telefonica's long position.| Rogers Communications vs. BCE Inc | Rogers Communications vs. Orange SA ADR | Rogers Communications vs. America Movil SAB | Rogers Communications vs. Telus Corp |
| Telefonica vs. Orange SA ADR | Telefonica vs. SK Telecom Co | Telefonica vs. America Movil SAB | Telefonica vs. KT Corporation |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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